[Editor’s Note: This story has been updated since it was originally published.]
Walmart has partnered with Microsoft to take advantage of the software provider’s cloud and artificial intelligence technology. The five-year agreement will take advantage of Microsoft’s software to improve Walmart’s online offerings.
Engineers from both companies will collaborate on the assessment, development and support phases of moving hundreds of applications to cloud architectures. Walmart will use AI technology to develop other innovations, such as the use of machine learning to improve supply chain efficiency.
Microsoft also is working on cashierless retail technology, according to Reuters. If it proves successful, the technology could present a challenge to Amazon Go and boost Microsoft’s position as a retail solution provider.
A sample of the system, which can track what customers add to their carts and automate the checkout process, has been shown off to retailers from around the world, people familiar with the matter told Reuters. The effort is being handled by Microsoft’s Business AI team, which includes a computer vision specialist hired from Amazon Go. The researchers are exploring the addition of cameras to shopping carts to track items and ways for smartphones to become a larger part of the customer journey.
Additionally, six retailers are working with Microsoft to develop their own checkout-free or related technologies at Microsoft’s Retail Experience Center in Redmond, Wash. These services could bring in revenue for the software company’s cloud solution.
Microsoft’s cloud sales are second only to Amazon’s, and offering additional services could prove a lucrative strategy for attracting more retail customers. Interested retailers see automated retail solutions as a way to keep pace with Amazon Go, which opened its first public location in Seattle on Jan. 22, 2018.
The concept is expanding slowly, with more locations planned for Chicago, Seattle and San Francisco. Amazon is reportedly in talks to open a Los Angeles store as well, but has yet to confirm its location or opening date.
It’s unclear how soon the technology could be scaled up and brought to market, but some experts believe it could be a major innovation in retail. Gene Munster, Head of Research at Loup Ventures, told Reuters that the U.S. market for automated checkout is worth an estimated $50 billion.